Exhibit 10.04


 





LOAN DOCUMENT MODIFICATION AGREEMENT


 


This Loan Document Modification Agreement
(this “Agreement”) is made as of this 29th day of September, 2015 by and between MIDDLESEX SAVINGS BANK, a Banking
Corporation organized and existing under the laws of Massachusetts, of 6 Main Street, Natick, Massachusetts 01760 "Lender"),
and Dynasil Corporation of America of 44 Hunt Street, Watertown, MA 02472 (the "Borrower"); and Optometrics Corporation
of 8 Nemco Way, Ayer, MA 01432, Radiation Monitoring Devices, Inc. of 44 Hunt Street, Watertown, MA 02472, RMD Instruments Corp.
of 44 Hunt Street, Watertown, MA 02472, Evaporated Metal Films Corp. of 239 Cherry Street, Ithaca, NY 14850 and Dynasil Biomedical
Corp. of 44 Hunt Street, Watertown, MA 02472 (the "Guarantors").


 


Whereas, on May 1,
2014 Lender made a loan (the “Loan”) to Borrower evidenced by a Revolving Line of Credit Note dated May 1, 2014 from
Borrower to Lender in the original principal amount of $4,000,000 (the "LOC Note"); and


 


Whereas, as security
for the payment and performance of Borrower's obligations under the LOC Note, Borrower and Guarantors executed and delivered to
Lender, (i) a Loan and Security Agreement dated May 1, 2014 between Borrower and Lender, (the “Loan Agreement”); and
(ii) UCC-1 Financing Statements covering the Collateral described in the Loan Agreement and filed with the Secretary of State of
the Commonwealth of Massachusetts, State of New York and State of Delaware (the "UCC-1 Financing Statements"); and (iii)
Guaranties dated May 1, 2014 from the Guarantors to the Lender (the "Guaranties"); and (iv) a Stock Pledge Agreement
by Borrower dated May 1, 2014 (the “Stock Pledge”); and (v) a Subordination Agreement dated as of May 1, 2014 given
by Massachusetts Capital Resource Company (“MCRC”) to Lender (the “MCRC Subordination”) by which all debt
of Borrower to MCRC (the “Junior Debt”) is subordinated to the Original Note. Collectively the Loan Agreement, the
UCC-1 Financing Statements, the Guaranties, the Stock Pledge, and the MCRC Subordination are referred to, together with various
other documents referred to therein, as the “Security Instruments”; and


 


Whereas, Borrower and
Lender have agreed to amend the terms of the Loan by adding or modifying certain financial covenants; by Lender granting to Borrower
consent to pay-down or pay-off a certain amount of the Junior Debt, and by adding an option on the part of Borrower to term out
a certain amount of Advances made to Borrower under the LOC Note in accordance with Section 2 of this Agreement; and


 


Now, therefore, in
consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, it is hereby agreed as follows:


  


		1.	Anything contained in Sections 2 and 3 of the MCRC Subordination to the contrary notwithstanding,
Lender hereby consents to the Borrower paying-down or paying off up to $3,000,000 of the Junior Debt, utilizing up to $2,000,000
of Advances under the LOC Note, subject to compliance with all of the terms and conditions of the Loan, including but not limited
to the Borrowing Base set forth in Section 1.4 of the Loan Agreement.



 






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		2.	At Borrower’s option, if, as and when Borrower achieves Adjusted EBITDA, as defined in new
Section 4.9A of the Loan agreement as inserted below, of $2,850,000, and on the condition that Borrower is not in default of any
of the terms and conditions of the Loan, including but not limited to the revised financial covenants set forth below, Borrower
may convert up to $2,000,000 of outstanding Advances under the LOC Note to a new five year term note, in Lender’s standard
form, bearing interest at the annual rate of (i) 4.5% fixed, if said option is exercised within sixty (60) days of the date of
this Agreement; or otherwise (ii) the then applicable Federal Home Loan Bank Classic Advance Regular Rate for a five (5) year term
plus three (3%) percent, to be rounded to the nearest one-eighth of one percentage point (0.125%). Upon such conversion, the terms
of the Loan Agreement shall be deemed to have been modified and amended by renumbering Section 1.1.2 to 1.1.1 (and deleting the
third, fourth and fifth paragraphs thereof) and inserting a new Section 1.1.2 as follows:



 


1.1.2 Term Loan. A Term Loan, evidenced
by a Term Note in the original principal amount of Two Million and 00/100 ($2,000,000.00) Dollars (the "Term Note").


 


Such loan or loans together are
referred to as the “Loan” or “Loans”, and such Line of Credit Note and the Term Note together are referred
to as the "Notes", as such Notes may be modified, extended, and/or amended from time to time.


 


The Borrower agrees to repay to
the Lender all advances (each, an "Advance"), whether pursuant to the Notes or otherwise, all of which, together with
all other indebtedness, liabilities and commitments which the Borrower owes to the Lender, whether (a) arising under this Agreement
or otherwise, (b) now existing or hereafter arising, or (c) direct or indirect, absolute or contingent, joint or several, due or
not due, are referred to as the "Obligation(s)."


 


The Loans are being made upon the
terms contained in this Agreement, the Notes, and any other Security Instrument (as defined herein), the terms of which
are incorporated herein.


 


		3.	The terms of the Loan Agreement are further modified and amended:



 


		A.	By deleting Section 3.4 in its entirety and inserting in lieu thereof the following:



 


3.4Loans and Investments.
Make any loan or advance (other than in the ordinary course of business and other than inter-company loans made to a Guarantor)
or declare any dividends or make any distributions to any individual or entity or make any investment in or with any individual
or entity, except Borrower may pay dividends, provided that after such payments, Borrower is in compliance with the financial covenant
set forth in Section 4.9 of this Agreement, and provided that, in any case, there shall be no intercompany advances, loans, or
investment from the Borrower or from the Guarantors to Xcede. Intercompany advances, loans or investments from the Borrower or
from the Guarantors to Biomedical will be limited to no more than $50,000 annually for the purpose of preserving Biomedical’s
patents and other Intellectual Property.


 






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		B.	By deleting Section 4.9 in its entirety and inserting in lieu thereof the following:



 


4.9 Debt Service Coverage.
At the close of each fiscal quarter of the Borrower, maintain a Debt Service Coverage ratio of at least 1.20 to 1.00 on a trailing
four quarter basis. "Debt Service Coverage" shall be determined for the relevant period, and shall mean (i) EBITDA excluding
non-cash and/or non-recurring expenditures or gains as permitted and the operating income or loss of the Xcede joint venture that
is consolidated into Borrower’s financial results, minus un-financed (cash) capital expenditures, minus dividends and distributions,
minus cash taxes paid for ongoing operations, divided by (ii) scheduled interest and principal payments made on all debt.


 


		C.	By inserting new Section 4.9A as follows:



 


4.9A Maximum Leverage.
At the close of each fiscal quarter of the Borrower, and on a trailing four quarter basis maintain Maximum Leverage of 3.00 to
1.00 with Leverage equal to (i) Senior Secured Debt plus Subordinated Debt; divided by (ii) Adjusted EBITDA, defined as EBITDA
excluding non-cash and/or recurring expenditures (expenses) or gains as permitted and the operating income or loss of the Xcede
joint venture that is consolidated into Borrower’s financial results.


 


		D.	By deleting Section 4.10 in its entirety and inserting
in lieu thereof the following:



 


4.10
Time of Testing. Borrower’s compliance with the financial covenants set forth in Sections 4.9 through 4.9A above
shall be tested at the time of Borrower’s furnishing of financial statements to the Lender as required by Section 4.2.1 herein,
at which time the Borrower shall also furnish the Lender with completed Covenant Compliance Certificates in the form attached
hereto as Schedule 4.14.


 


4. Borrower and Guarantors confirm
that the Security Instruments, as amended by or added to in connection with this Agreement, constitute the valid and enforceable
obligations of Borrower and Guarantors, and that neither Borrower nor Guarantors has any existing claims, defenses or rights of
setoff with respect thereto.


 


5. Borrower and Guarantor
hereby warrant and represent that the statements set forth in the recitals above are true and correct, and that all representations
and warranties made by Borrower and Guarantor in the Security Instruments continue to be true and correct in all material respects.


 






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6. It is further agreed
that this Agreement shall not, in any manner, release, relinquish, or otherwise affect the liens, security interests, and rights
created by or arising under the Security Instruments or its priority over other liens, charges, or encumbrances affecting the Collateral
referred to therein (except by extending such lien to secure, inter alia, any and all new obligations created hereby and pursuant
to any New Note and/or Amended and Restated Note executed in connection herewith) or Borrower’s or Guarantors’ liability
there under; and all other terms, conditions and covenants therein contained which are not hereby amended, are hereby ratified
and confirmed as previously written.


 


7. Borrower and Guarantors acknowledge
that there are and were no oral or written representations, warranties, understandings, stipulations, agreements or promises made
by any party or by any agent, employee or other representative of any party, pertaining to the subject matter of this Agreement
which have not been incorporated herein. No
express or implied consent to any further modifications involving any of the matters set forth in the Security Instruments or herein
shall be inferred or implied by Lender's execution of this Agreement. Any further modification of the Loan shall require the express
written approval of Lender. No provision hereof shall be modified or limited except by a written instrument signed by the parties
hereto, expressly referring hereto and to the provision so modified or limited.


 


8. Except as expressly
amended and modified by this Agreement, all of the terms and conditions of the Security Instruments shall remain in full force
and effect, and shall apply to any advances made pursuant to the Original Note (but only if it is not superseded by an Amended
and Restated Note hereunder) and any New Note and/or Amended and Restated Note executed herewith.


  


 


 


 


 


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Executed under seal
this 29th day of September, 2015.


 


	 	Dynasil Corporation of America	 	 	Optometrics Corporation
	 	 	 	 	 
	By:	/s/ Thomas C. Leonard	 	By:	/s/ Thomas C. Leonard
	 	Thomas C. Leonard, Treasurer	 	 	Thomas C. Leonard, Treasurer
	 	 	 	 	 
	 	 	 	 	 
	 	Middlesex Savings Bank	 	 	Radiation Monitoring Devices, Inc.
	 	 	 	 	 
	By:	/s/ Tony Zhang	 	By	/s/ Thomas C. Leonard
	 	Tony Zhang, Vice President	 	 	Thomas C. Leonard, Treasurer
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	RMD Instruments Corp.
	 	 	 	 	 
	 	 	 	By:	/s/ Thomas C. Leonard
	 	 	 	 	Thomas C. Leonard, Treasurer
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Evaporated Metal Films Corp.
	 	 	 	 	 
	 	 	 	By:	/s/ Thomas C. Leonard
	 	 	 	 	Thomas C. Leonard, Treasurer
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Dynasil Biomedial Corp.
	 	 	 	 	 
	 	 	 	By:	/s/ Thomas C. Leonard
	 	 	 	 	Thomas C. Leonard, Treasurer









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